itch Ratings-New York-03 December 2021: Both chargeoffs and late stage delinquencies hit record lows for U.S. credit card ABS last quarter, according to the latest U.S. Credit Card Movers & Shakers report from Fitch Ratings.
“3Q21 performance generally improved over the last quarter as coronavirus-related risks continued to subside; however, new variants may pose risks that we are watching closely” said Fitch Senior Director Herman Poon.
Prime chargeoffs fell in 3Q21 to an average of 1.93%, down from 2.42% in 2Q21, once again marking the lowest quarterly average since the inception of Fitch’s Chargeoff Prime Credit Card Index in 1991. 60+ day delinquencies also reached all-time lows with 0.58% in 3Q21 vs. 0.66% in 2Q21. “Even as payment relief programs and federal stimulus efforts have dissipated, delinquencies continue to remain lower than in 2020,” said Poon.
Retail chargeoffs broke record lows in 3Q21, down to 3.72% from 5.04% in 2Q21, levels not observed since inception of Fitch’s Retail Credit Card Index in 1996. 60+ day delinquencies fell another 15 basis points (bps) to 1.35% in 3Q21 and marked the lowest levels observed in the index. “Consumer savings remain elevated, which is a key factor keeping borrowers from delinquency and keeping payment rates high,” said Poon. “With delinquencies trending downwards, we expect chargeoff performance to remain stable in the near term.”
Fitch’s latest “Credit Card Index: Movers & Shakers-U.S. 3Q21” is available at www.fitchratings.com.
Herman C. Poon
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Fitch Ratings, Inc.
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